*In this exercise, all the prices are excluding Vat unless specified*

Question 1: A person purchases an article for Rs. 6200 and sells it to a customer for Rs. 8500. if the sales tax (under VAT) is 8%; find the VAT paid by the person.

Answer:

Cost Price of the article

Selling Price of the article

VAT = Tax Charges – Tax Paid

VAT Tax on Selling Prices Tax on Cost Prices

Question 2: A purchases an article for Rs. 3600 and sells it to B for Rs. 4800. B in turn sells the article to C for Rs. 5500. If the Sales Tax (under VAT) is 10%, find the VAT levied on A and B.

Answer:

Cost Price of the article for A

Selling Price of the article A

Cost Price of the article for B

Selling Price of the article B

Question 3: A manufacturer buys raw material for Rs. 60,000 and pays 4% tax. He sells the ready stock for Rs. 92,000 and charged 12.5% tax. Find the VAT paid by the manufacturer.

Answer:

Cost price of the raw material

Selling price of the stock

VAT = Tax recovered on sale – Tax paid on purchase

Question 4: The cost of an article is Rs. 6000 to a distributor. He sells it to a trader for Rs. 7500 and the trader sells it to a customer for Rs. 8000. If the VAT rate is 12.5%; Find the VAT paid by the:

- Distributor
- Trader

Answer:

Cost Price of the article for distributor

Selling Price of the article for distributor

Cost Price of the article for Trader

Selling Price of the article for Trader

Question 5: The printed price of an article is Rs. 2500. A wholesaler sells it to a retailer at a 20% discount and charges sales tax at the rate of 10%. Now the retailer, in turn, sells the article to a customer at its list price and charges the sales tax at the same rate. Find:

- The amount that the retailer pays to the wholesaler.
- The VAT paid by the retailer.

Answer:

Printed Price of the article for wholesaler

Question 6: A retailer buys an article for Rs. 800 and pays the sale tax at the rate of 8%. The retailer sells the same article to a customer for Rs. 1000 and charges sales tax at the same rate. Find:

- The price paid by a customer to buy this article.
- The amount of VAT paid by the retailer.

Answer:

Cost price of the article

Selling price of the article

Price paid by the customer

VAT = Tax recovered on sale – Tax paid on purchase

Question 7: A shopkeeper buys 15 identical articles for Rs. 840 and pays sales tax at the rate of 8%. He sells 6 of these articles at Rs. 65 each and charges sales tax at the same rate. Calculate the VAT paid by the shopkeeper against the sale of these six articles.

Answer:

Cost price of the article

Selling price of the article

VAT = Tax recovered on sale – Tax paid on purchase

Question 8: The marked price of an article is Rs. 900 and the rate of sales tax on it is 6%. If on selling the article at its marked price, a retailer has to pay VAT=Rs.4.80; Find the money paid by him (including sales tax) for purchasing this article.

Answer:

Let Cost price of the article

Selling price of the article

VAT = Tax recovered on sale – Tax paid on purchase

Money paid

Question 9: A manufacturer marks an article at Rs. 5000. He sells this article to a wholesaler at a discount of 25% on the marked price and the wholesaler sells it to a retailer at a discount of 15% on its marked price. If the retailer sells the article without any discount and at each stage, the sales-tax is 8%, calculate the amount of VAT paid by:

- The Wholesaler
- The Retailer [2010]

Answer:

Market Price of the article for wholesaler

Selling price of the article for retailer

Vat paid by retailer

Vat paid by wholesaler

Question 10: A shopkeeper buys an article at a discount of 30% and pays sales tax at the rate of 8%. The shopkeeper, in turn, sells the article to a customer at the printed price and charges sales tax at the same rate. If the printed price of the article is Rs. 2500; Find:

- The price paid by the shopkeeper.
- The price paid by the customer.
- The VAT paid by the shopkeeper.

Answer:

Printed Price of the article for shopkeeper

Question 11: A shopkeeper sells an article at its list price of Rs. 3000 and charges sales tax at the rate of 12%. If the VAT paid by the shopkeeper is Rs. 72, at what price did the shopkeeper buy the article inclusive of sales tax?

Answer:

Let Cost Price of the article for shopkeeper

Selling Price of the article for shopkeeper

VAT = Tax recovered on sale – Tax paid on purchase

Tax paid by the shopkeeper

Price paid by the shopkeeper

Question 12: A manufacturer marks an article for Rs.10,000. He sells it to a wholesaler at a 40% discount. The wholesaler sells this article to a retailer at a 20% discount on the marked price of the article. If a retailer sells the article to a customer at a 10% discount and the rate of sales tax is 12% at each stage, find the amount of VAT paid by the:

- Wholesaler
- Retailer

Answer:

Market Price of the article for wholesaler

Vat paid by retailer

Vat paid by wholesaler